Apple wows, but faces challenges

Sep 14, 2015

Apple has once again wowed the world with the launch of the iPhone 6S range, the iPad Pro and a new Apple TV.
This is according to Ronan de Renesse, Ovum’s consumer technology analyst. He points out, however, that the innovation gap with its key competitors is closing to the point where Apple needs to follow rather than lead.
This is clear in three areas:
* The iPad Pro features a stylus and an attachable keyboard which Samsung and Microsoft have been offering with their tablets for several years.
* The new Apple TV features voice-controlled search and a large app library which can already be seen today on Android TV products like Nvidia’s Shield.
* Many of the iPhone 6S camera technology and features have already been implemented by Nokia, HTC, and Sony.
“But Apple excels in the execution of those new consumer technologies in order to provide the best consumer experience on the market and the iPad Pro and the new Apple TV deliver this,” De Renesse comments.
“The iPad Pro will be particularly successful among professional Apple MacBook users. The higher price point compared with other iPads should help regrow iPad revenues which declined 23% between 2Q14 and 2Q15..
De Renesse points out that the iPhone is Apple’s largest and most profitable product segment (63,2% of revenues in Q2 2015) and also the one experiencing the strongest competition, such as:
* The iPhone 6s matches the competition in terms of features and innovation but does not exceed it. The new 3D Touch user interface could make a difference but it will take time to catch on with consumers and developers. This is an entirely new way to interact with devices that people are unfamiliar with.
* The iPhone 5s, 6, 6 Plus, 6s, and 6s Plus makes the strongest smartphone product range Apple has ever had, addressing almost all customer segments and price points. This will maximise iPhone sales across the world and guarantee its leading smartphone brand position.
* New pricing for the iPhone 5s, 6, and 6 Plus will help boost sales in the Asia Pacific region. Since the beginning of 2015, Apple makes more revenues from Greater China than it does from Europe. However, the rest of Asia Pacific, including India, Indonesia, Malaysia, and the Philippines, generated less than 6% of its revenues in 2Q15. Apple must gain stronger market share in those new growth markets.
“We expect Apple handset sales to grow 12,3% in 2015 to reach 216-million unit sales,” De Renesse says. “Nearly two-thirds of that growth will come from the Asia Pacific region. How Apple positions the iPhone range in that region, especially outside of China and India, will be key.”